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OilPrice.com Weekly Oil Market Update: 02/22/2010 - 02/26/2010
Submitted by Darrell Delamaide of OilPrice.com
Crude Oil Hits Ceiling in Week as Hedge Funds Attack Euro
Crude oil broke through the $80 a barrel ceiling repeatedly during the week but kept falling back as hedge funds placed big bets on the Euro’s decline.
The fiscal drama in Greece held global markets hostage much of the week as worries about the impact of the Greek crisis on the euro outweighed comments from Federal Reserve chairman Ben Bernanke about continued low interest rates in the U.S., pushing the euro down against the dollar and damping crude prices.
The euro recovered some ground on Friday amid new reports of European aid for Greece after falling to a nine-month low of $1.3440 on Thursday. Germany’s state-owned bank KfW may take part in a planned Greek bond offering next week, according to market reports.
The Wall Street Journal reported on Friday that a small group of elite hedge fund traders have concluded that the euro could be headed to parity with the dollar and their bearish bets are increasing the downward pressure on the 16-nation currency.
The Journal compared the situation to the hedge fund attack on the dollar in 2008. However, the trades are not expected to lead to a collapse of the currency as the attacks of George Soros on the British pound did in 1992, the paper said.
Positive U.S. economic data on Friday, including a revised fourth-quarter GDP annual growth rate of 5.9%, help crude oil futures claw back some of Thursday’s losses and near the $80 threshold again. Nymex’s benchmark West Texas Intermediate settled at $79.66 on Friday, after topping $80 earlier in the week.
In spite of crude’s difficulties in staying above $80, some analysts issued bullish prognoses for energy futures. Goldman Sachs forecast a new trading range of $85 to $95, up from the $70 to $80 of the past several months, amid supply disruptions from the North Sea and Venezuela and the impact of the Total refinery strike, which was resolved earlier this week.
Other analysts, too, looked for fundamental supply and demand considerations to reassert themselves amid the currency turmoil and lift crude oil futures into a higher trading range. Oil futures prices gained more than 9% in February but remained below January’s highs.
Source: http://www.oilprice.com/article-crude-oil-hits-ceiling-in-week-as-hedge-funds-attack-euro.html
By Darrell Delamaide of OilPrice.com who focus on, Fossil Fuels, Metals, Crude Oil Prices and Geopolitics To find out more visit their website at: http://www.oilprice.com
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In March the bombs will drop on Iran.
Inspector Asset
WallStOnion.blogspot.com
So very silly. All the focus on consumption and not on production. Not supply. Production. Have a look at production prospects as the old fields die.
What happens if the DX ever goes back down towards 70? 100 dollar oil with no jobs recovery.
What?; is this stale troll horseshit supposed to sound like wisdom? GTFOOH.
Um OPEC wont even let oil go to $80 +. The worst for oil is $80+. 2 reasons- OPEC only 40% of production and other countries- RUSSIA produce more at 80. Demand sucks right now for oil in OECD, and $80 + oil wont work unless employment to population actually is better than crap...
Nevertheless, trade oil based on Dollar.... when the dollar falls contango tends to rise with inventories due to the potential for increased returns on storage visavis relative pricing, and a lower dollar decreases imports...
GS- c'mon sheep herding eventually go to slaughter :)
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